Per EU sources, things are not as chaotic as they seem...Dominic Raab walkout was no surprise to EU chiefs and part of No 10 "choreography" to send a message to home audience that May is a staunch defender of UK.
There was a "good" proposal from Olly Robbins on the backstop but there were two key issues with it and that's why there was no agreement over the weekend.
Problem 1: The EU didn't like UK attempt to drop a future relationship ingredient (all-UK customs union) into the mix of the divorce deal. I understand EU *will* accept a full UK customs union, but **only after** the backstop is agreed and signed.
Problem 2: No 10 realised the political climate at home was too hot for a deal that looked like capitulation, so they decided Raab could do a walkout for a bit of political theatre.
I understand a new proposal is being drawn up by UK that shifts the language (but the EU says it can't change the substance).
EU expects that proposal will allow them to declare "significant progress" on backstop later this week, but not a full deal. This will open door to a November summit, where in theory the deal is done.
The EU thinks May is now in the final stretch of a pressure exercise where, as we get closer and closer to no deal, Brexiteer MPs and DUP are forced to "look into the abyss" of no deal chaos.
The belief is that Brexiteers will eventually cave as the alternative is economic Armageddon. Plans to focus on no deal planning at this week's summit will reinforce that dilemma.
In other words, some of the more powerful figures on the EU side believe the DUP is bluffing and might be bought off...
That's not what I'm hearing from DUP side, which is that the backstop is an existential threat to unionism and no amount of money or honeyed words will change that.
Either way, there won't be much action this week. Main job this week is allowing the UK some space to to shift a few inches on backstop, to allow a summit in November. All eyes on May now.
